Making MDM a Part of Your ERP Planning

WHY

MDMSHOULD BE A PART OF YOUR

ERP PLANNING

Webinar - May 2016www.verdantis.com | [email protected] © 2016 Verdantis Inc. All Rights Reserved

http://www.verdantis.com/

About the Presenter

Arthur RaguetteExecutive Vice President, Verdantis, Inc.

[email protected]

+1 609 799 5665 x225(0)

Arthur is very passionate about the application of innovative technologies

to solve real-world business problems with a strong emphasis on large

enterprise solutions.

He has more than a decade of experience of working with Software for

Master Data Management and Data Governance for multiple domains and

across industries. Arthur’s prior technology passions included high

performance B2B middleware and hybridized SaaS applications for HR,

Employee and Education related domains.

www.Verdantis.com | [email protected]


Realizing OpportunitiesOpportunities from integrating MDM into your ERP Planning

$

Controlling CostsHigh costs are always an issue, but withnew technologies and efficiencies, youcan control costs better and make costmanagement a positive for yourbusiness that can help you countercompetition better

Process IntegrationThe era of silos is gone. Integration of processes and different business groups optimizes the chance for Operational and Business efficiencies

Managing Data betterThe new world runs on data, and companies that manage data better will get a huge leg up in the race to the top. A focus on data can help Businesses manage their objectives and strategies better



Realizing OpportunitiesRealizing the Need for MDM

ERP IMPLEMENTATION/ CONSOLIDATION

The most critical Enterprise-level program that

companies undertake involves installation of a

new ERP or consolidating data for geographically

dispersed organizations.

It is imperative to load reliable data into the ERP

to reap the desired benefits of upgrades and

consolidation. Corrupt data will only lead to

inefficiencies, lower ROI and possibly mask

negative outcomes.



Data Management during ERP Implementation

Significance of Data during an ERP implementation

Data migration is a critical part of ERP implementations which involve

multiple source systems, locations & languages. Master Data Cleansing

& harmonization activities have become essential.

Instances of multiple ERPs

When multiple ERPs are being consolidated into one single instance,

data based on different taxonomies has to become mutually

intelligible. Normalizing and standardizing this data is essential for the

new ERP to work properly.



Data Management during ERP Implementation

Data integration

Complex systems, data structures, architectures need active management

of critical master data and an ERP on its own doesn’t offer the tools to

manage effectively. These capabilities can be enhanced using a Domain-

specific MDM solution.

Data governance

Data governance should be an integral part of any major organizational

process to ensure the reliability of the data. A data management system

is an easy way to implement proper data governance during an ERP

implementation.



5 Reasons why MDM should be a part of ERP Blueprint

Why MDM

should be a part of

ERP Blueprint

During ERP

Implementation

Post ERP

Implementation

Clean data

Quicker implementation

Eliminate redundant orders

Ongoing savings

Inventory rationalization




During ERP Implementation

Clean data

Master Data Cleansing should be planned at the beginning of the project. A

third party expertise with deep domain skills and capabilities in providing

automation will clean and improve existing or incomplete data.

Quicker implementation

An MDM initiative combined with AI-based technology and deep domain

expertise makes ERP implementation quicker as the incremental time is

minimized and consistent & reliable data accelerate the implementation and

testing phases




Post ERP ImplementationEliminate redundancy

With Standardized, de-duplicated, accurate and enriched master data, bringing about a

synergy among all the applications, legacy and proprietary systems of the company

provides better visibility to the enterprise to identify and removes redundant orders.

Inventory rationalization

MDM prevents data duplication at source, ensures a robust workflow process, and validates

and enriches master data on a real-time basis, enabling enterprise to rationalize inventory

optimally.

Ongoing savings

Effective and stringent data governance frameworks and approval workflows ensure master

data integrity, improve procurement process times and mitigate risks of supply chain

disruption. All this brings huge ongoing savings to enterprises.



MDM in the ERP Implementation Lifecycle Master Data Management is usually perceived to be purely an ERP improvement method and not

having any long-term business benefits. This is why it is usually left out from ERP blueprints.

However, MDM can impact the success of an ERP initiative heavily and hence needs to be planned

at the key stages of the ERP project. It is recommended for an ERP project to leverage third

party solutions with strong domain expertise to achieve expected results.

Business Process

Study

Pre-Implementation

Training

Requirement

& Gap Analysis

Business Mapping

Report

Master Data

Preparation

& Management

Project Plan

Go Live End user

Training

Routines &

Workflow Design

Migration of

Historical Data

ERP System

Installation

Post-Implementation

Support



MDM in the ERP Implementation Lifecycle

Integrating Master Data Management with an ERP system can deliver many significant benefits

to an enterprise. The below mentioned statistics are part of research done by Aberdeen which

reveal the improvement that incur during a Master Data Management initiative with ERP

implementation.

Metrics NO MDMMDM integrated

with ERP

Improvement in complete and on time deliveries of

supply chain achieved from ERP Implementation

Inventory Accuracy

Improvement in Inventory turns achieved from ERP

implementation

+14%

91%

+33%

+18%

96%

+43%

(Source: Aberdeen Research)



MDM in the ERP Implementation Lifecycle

(Source: Aberdeen Research)

Optimized ROI from ERP implementation with MDM Integrated

Metrics NO MDMMDM integrated

with ERP

Reduction in operational costs post ERP implementation

Reduction in administrative costs post ERP implementation

Internal business process schedule compliance

Year over year change in time to decision

Change in profitability over 2 consecutive fiscal years

-14%

-12%

90%

-17%

+9%

-17%

-16%

93%

-18%

13%

Based on earlier detailed statistics, it can be easily concluded that implementing an MDM initiative

during an ERP implementation using automated solutions that combine AI-based technology and

deep domain expertise can ensure the success of the project. Master Data Management can

unlock the true potential of an ERP implementation project and achieve expected results.



Verdantis Client Cases

The Client –a leading global provider of cost-effective and reliable industrial / community scale water treatment

systems and services. ERP consolidation post acquisition of several US Companies.

The Data – The company had 18 different business platforms.

1,300,000 active materials

No corporate categorization for material or part classification

No common protocol for part descriptions or attribute callouts

Duplicates within and across legacy systems

Verdantis Benefits – Harmonization:

Provides consistent and actionable information

Improves spend and supply management

Enables part standardization and lean inventory

Data Governance:

Process standardization drives continuous improvement

Enables elimination of duplicated data entry across applications

Facilitates interfaces between and among applications

Enables centralized maintenance and change management



Real-Dollar Benefits: COMPANY PROFILE

Company Profile of Process Manufacturer

• 8 Billion Annual Revenue

• 1 Billion Annual MRO Spend

• 400 Million Inventory Value

• MRO Material Master Count

• Post Initial Merge of Systems 400,000 Items

Harmonization Results

• SKU Count

• Post Cleansing and Enrichment - 340,000 Unique Items

• Raw Count Improvement

• 15% reduction in total SKUs

• 10% identification of duplicate inventory assets

How Material Master impacts the Balance Sheet and the P&L



Real-Dollar Benefits: DATA CLEANSINGBenefits of implementing the Data Cleansing Initiative

Annual Inventory Carry cost reductions of 4.4% (Factored cost of capital) as write-down (Positive impact to balance sheet)

• 400 Million in Inventory

• 10% Duplicate Identification

• 40 Million in Duplicate Inventory value

• Write Down of Factored Costs at 4.4% of 40 Million = $1,760,000

Cost Reduction on aggregation of demand across 15% of $1BN in MRO

• 1 Billion in Maintenance, Repair and Operations Material

• 15% Identified through Harmonization as Similar (Across 10% Supplier Base)

• 150 Million addressable spend

• 12.5% reduction in costs through strategic sourcing

• Cost Reduction of 12.5% of $150 Million = $18,000,000

ANNUALIZED NET COST REDUCTIONS FROM : DATA CLEANSING = $19,760,000



Real-Dollar Benefits: DATA GOVERNANCEBenefits of implementing the Data Governance Initiative

Verdantis Integrity for Reduction of Maverick Spend

• 80% of the 1B Maintenance, Repair and Operation Spending is covered by preferred / pre-negotiated contracts – $800 Million in Spend

• Data Governance improved Catalogue Quality –Reduced Maverick Spend from 40% to 25%

• 15% gain in compliance = an additional 120 Million in contracted spending

• Average of 16.5% Cost Reduction for pre-negotiated categories

• Cost Reduction of 16.5% of 120 Million = $19,800,000

ANNUALIZED NET COST REDUCTIONS FROM DATA GOVERNANCE = $19,800,000

COMBINED ANNUALIZED NET COST REDUCTIONS: $39,560,000



The Verdantis ExperienceMaterial Master Data Cleansing and Governance

• Over 12 years of Material and Product Master expertise and projects with Global clients delivering

unmatched technology and attention to ROI.

• Experts in Material / Part Classification and Attribution.

• SaaS deployed solutions to more cost-effectively and timely compliment major ERP/EAM and Legacy

systems.

• The most comprehensive suite for collaborative and automated high speed batch material data

cleansing solutions – Verdantis Harmonize.

• Options for On-going new Item create and data governance with embedded classification and

attribution models – Verdantis Integrity.

Note: Integrity leverages classification model, values, spec sheets, abbreviations, UOM and more from

Harmonize



THANK YOU!

© 2016 Verdantis Inc. All Rights Reserved

CONTACT US:

103 Carnegie Center, Suite 201,

Princeton, NJ 08540

(+1) 866 987 4463 | [email protected]

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